The NASCAR Hall of Fame has struggled to make money and bring in solid crowds since its 2010 opening in Charlotte, North Carolina. Now, the city has proposed a new deal to help get out of obligations that it owes on the building.
As part of the deal, the city would make a payment of $5 million to Wells Fargo and Bank of America on construction loans. This sum would come from a 2 percent hotel tax that was implemented during the Hall’s early development.
The banks would then forgive the remainder of a $19 million loan, and NASCAR itself would waive $3.2 million in royalties that it has not yet received due to the Hall’s financial struggles.
NASCAR would also see its future royalty payments reduced from 10 percent of Hall revenues to 3 percent of revenues in excess of more than $10 million.
Additionally, the Charlotte Regional Visitors Authority, operators of the Hall, would give each bank five years of Hall sponsorship, valued at $250,000 annually.
The Charlotte city council is expected to vote on the deal next Monday.
Deputy City Manager Ron Kimble said to the Charlotte Observer that the goal was to “bring the Hall into a break-even position,” but the Observer’s Steve Harrison reports that the Hall is still expected to lose money in future years even if the proposal goes through.
Adding to the difficult situation, NBC Charlotte (WCNC-TV) reports that members of the council are mixed on the proposal and whether or not the Hall can survive on its own even if the debt is paid off.
The Hall was expected to bring in 400,000 visitors annually, but last year, it only attracted 170,000 visitors. It has also lost more than $1 million per year since opening its doors, and corporate sponsorships that it expected to sell and use to pay off the bank loans have not come to fruition often enough.
A second, $20 million loan was also used to help build the Hall in addition to the aforementioned one. This loan involves the sale of public land near the Hall.
The Observer report notes that the city has already sold one part of the land and also has a contract of nearly $10 million in place to sell another part. It expects to eventually pay off this loan in full.